Freebies or welfare schemes: The political conundrum

By Professor Satya Narayan Misra*

Responding to a PIL that freebies must be stopped, the CJI Mr. Ramana has observed: We must think about tax payers and the national economy. And to what extent the courts can regulate, given its constitutional limits. Interestingly, the trigger for this debate has come from the Prime Minister when he warned the youth in an election rally not to be carried away by the freebies culture. The sanctimonious note could not have been more ironic when his interim budget in 2019 unveiled the PM-KISAN scheme, transferring Rs 6000 per year to small and marginal farmers with an annual budget commitment of Rs 65000 cr. The opposition parties like DMK & AAP in Delhi are up in arms against the Centre’s move to clamp down on freebies.

Harking back to the history of freebies the first salvo was fired by MGR, the filmstar-turned-politician who introduced the Mid-Day Meal Scheme on 1^st July 1982 at Trichy. He said: Let’s provide a hot meal akin to lunch served in a middle-class home by the mother. Carrying a budget of Rs 133 cr, this scheme provided hot mid-day meals to 56.9 lakh children and provided employment to 1.8 lakh, of whom 1.58 lakh were destitute women. Attendance in primary schools improved to 96.2%. The Supreme Court in November 2001, responding to a PIL decreed: that government & government assisted public schools should provide cooked mid-day meals. The scheme which was being criticized as a freebie has become a flagship program of all political parties in all states. Given the fact that India is home to 34% of its children being stunted due to persistent food deprivation and 57% of its girl children anemic (NFHS V report), MGR’s public policy to provide 400 calories to school-going children has been a watershed transformative public policy in addressing the issue of pervasive malnutrition and need to attract school going by poor and famished children.

The small and marginal farmers constitute 86% of our farming community and account for 47% of India’s population with a lowly share of 17% in the GDP. They are the most vulnerable section with high indebtedness, low productivity, and poor access to credit. They are an ideal constituency to garner votes through cash transfers. Chandra Sekhar Rao, CM Telangana unveiled the Rythu Bandhu Scheme in February 2018 to provide cash support to 5.8 million farmers Rs 5000 per acre per season to support farm investment. With Rs 12000 cr allocated for this, it had a catalytic impact on voting in favor of the TRS. Not to be left behind, Odisha Chief Minister Naveen Patnaik launched the KALIA scheme with an allocation of Rs 10000 cr to relieve the farmers from the debt trap and help the marginal cultivators and landless laborers financially to improve agricultural productivity. The PM in May 2022 distributed the eleventh tranche of the PM-KISAN Scheme to 10 cr farmers. Given the high vulnerabilities of small and marginal farmers, DBT schemes like Rythu Bandhu, KALIA and PM-KISAN have been signature tunes to garner votes.

In a perceptive study of the Rythu Bandhu Scheme in Telegana in 2020, Padmini Ramesh found out that between input subsidy and cash transfer, the farmers prefer the latter. Between income support and price support, the preference is for DBT. This is not surprising as large farmers look for high MSP as the farmer’s agitation led by the Big Boys in farming demonstrated. Padmini’s study, however, very clearly reveals that it did not contribute to productivity. Where the government is floundering is not looking at long-term agricultural productivity by providing enough allocation for irrigation, in which most states in the East are critically deficient. Only 30% of the land has assured irrigation in Odisha as against 95% in Punjab. Measures like assured water, prudent management of water through drip irrigation as is being practiced by Israel, provision of agricultural credit, consolidation of holdings, more remunerative cropping patterns, and contract farming remain the troubling script of India’s agricultural sector. While DBT is necessary to resuscitate farmers from financial ruin, the durable solution will be to improve agricultural productivity.

There is a swirling debate in the country today to differentiate between welfare schemes and freebies. Schemes like MNREGA (2005), which provide 100 days’ guaranteed employment to unskilled rural workers is one such inclusive welfare scheme that benefits 5cr poor families, the bulk of whom are women, SC& ST. The reduction in the percentage of people below the poverty line by 26% (300 M) in the last 15 years is largely due to this employment generation program. Similarly, the Mid Meal Program has significantly improved school attendance and ensured a hot mid-day meal to every child going to a public school. The Sarva Shiksha Abhiyan (SSA) scheme to provide free education to every child in the age group of 6-14 has been a watershed moment in making the right to education and concomitantly a pathway to the right to life possible for a large number of poor children. The ICDS program in 1975 is another major welfare scheme for improving the nutrition of around 60 million children and 10 million expecting & nursing mothers. Quite clearly these welfare schemes cannot be clubbed with cash transfers or freebies dispensed during elections.

The other issue that needs to be plugged urgently is the non-merit subsidy which constitutes nearly 5.4% of our GDP. Rich farmers in Punjab getting subsidized fertilizer, electricity, and water at less than its cost, and affluent families enjoying subsidized LPG are examples of such non-merit subsidies. While India has embraced a free-market economic policy since the 90s, it must not abdicate its mandate of a welfare state where inclusive development and equal access to quality education, health care, and nutrition is the constitutional mandate of any party in power. Economic efficiency cannot supplant the canons of economic equity and the right to the dignified living of all Indians. Vote bank politics through freebies need to be eschewed by all parties. In the cacophony of ideas, the welfare schemes and India as a welfare state must not be abdicated. They need to be funded better and bolstered. Inclusive human development is good politics.

Prof  Misra is Emeritus Professor

DISCLAIMER: The views expressed in the article are solely those of the author and do not in any way represent the views of Sambad English